Risk-free cryptocurrency investing — Single exchange cross coin arbitrage

This is one of the project I am most proud of and enjoyed working on. It is still in an early development stage and will continue to take form as my investment strategies grow and the crypto market matures.

The following article is a reformatted version of a white paper written for this idea.

As of now this project is running on EC2 and I working to make it a operational systems in the following year. There are a lot of moving parts and exposure to risk during the implementation phase — however the final product seems to be a promising investment tool.

Please enjoy and comment on the paper below:

Abstract

It is posited as Efficient Market Hypothesis that all securities always trade at their fair price. However, it is easily observed that no markets can be efficient all the time. In the long term, markets may be efficient — but it is the job of market actors executing orders across assets to reach a homeostatic market. Most arbitrage potentials are observed across exchanges. Meaning that buying and selling inefficient are generally found where you buy in one location (eg. NYSE) and sell on another exchange (eg. LSE). This is exactly not what we are exploring. This paper aims to ask and answer questions about cryptocurrency arbitrage opportunities within a single exchange that hosts many markets that have assets you can sell for more than one base asset. The transitive property “If…